Gold resumes gains near record highs

Gold prices rose in European trade on Monday, resuming gains after a hiatus on Friday and approaching record highs once more as the dollar slowed down. 

The gains are curtailed however as risk appetite improves in the market, with concerns about a war between Iran and Israel receding as both countries scale back their rhetoric.

Prices

Gold prices rose 1.2% to $2372 an ounce, with a session-low at $2344.

Prices lost 1.25% on Friday on profit-taking off recent record highs at $2431 an ounce. 

Prices rose 0.6% last week, the fourth weekly profit in a row as major investment funds and central banks buy up the precious metal.

The Dollar 

The Dollar index fell 0.15% on Monday off five-month highs at 106.11, on track for the first loss in four days on profit-taking. 

The dollar is currently losing ground amid positive sentiment in the market, and ahead of important US retail sales data. 

US Rates 

The odds of a 0.25% Federal Reserve interest rate cut in June stand at just 32%, while the odds of such a cut in July stand at 52%. 

Retail sales data will provide a fresh perspective and could change the pricing for such odds. 

Haven Demand Declines .. Why? 

Haven demand receded worldwide as the prospects of a war between Israel and Iran vanish. 

Iran launched drones and missiles towards Israeli land this week, in response to an alleged Israeli attack on the Iranian consulate in Syria. 

Iran said the military response has been done, while US President Joe Biden informed the Israeli government that the US won’t support an Israeli counterattack on Iran. 

Actual Market 

Actual demand in China has surged on gold prices with the central bank aiming to stabilize the yuan through it, while record prices in India forced traders to initiate discounts for the sixth week in a row.

The SPDR 

Gold holdings at the SPDR Gold Trust fell 4.03 tonnes on Friday to a total of 826.72 tonnes, the lowest since April 5.